AIA Sees Progress On Legislation
Jan 27, 2009
By Michael Bruno
The Aerospace Industries Association (AIA) believes that the Obama administration and the 111th Congress will ratify two groundbreaking export licensing reform treaties, repeal a 3 percent revenue withholding rule that looms over federal contractors and make permanent a long-sought research-and-development tax credit.
But the chief executive of the U.S. aviation, aerospace and defense sector’s Washington trade organization also voices some concern with acquisition reform efforts brewing along Pennsylvania Avenue, and she argues that the record-setting business sector should be included in potential stimulus spending this year and not be a bill-payer for other federal priorities.
“We really want to work with this administration,” AIA chief Marion Blakey said in a roundtable discussion at Aviation Week’s Washington office Jan. 26.
AIA has been pushing its arguments since early last year when it sought to educate presidential candidates and lawmakers on issues important to the sector. Since the historic November 2008 elections ushered in President Barack Obama and a strengthened Democratic Party on Capitol Hill, AIA has reinvigorated its advertising and outreach as the newly installed federal government wrestles with the economic crisis and other challenges like two wars.
In turn, Blakey and AIA representatives are optimistic of ratification of the British and Australian treaties, as well as a permanent R&D credit and repealing the 3 percent rule, set to take effect in 2011 (Aerospace DAILY, Oct. 15, 2007). Legislative language attached to the expected stimulus bill now working its way through the Hill could delay the withholding’s implementation by at least a year, if not repeal it altogether. The requirement was passed three years ago in part due to concerns about tax delinquencies by federal contractors.
Meanwhile, Blakey and Cord Sterling, AIA’s vice president for legislative affairs, have heard no significant opposition to the treaties, which were stymied last year by now-Vice President Joe Biden and his Republican partner leading the Senate Foreign Relations Committee, due in part to questions of congressional prerogatives. Sterling says U.K. Prime Minister Gordon Brown is expected to send Washington a letter that could help restart ratification efforts in the Senate.
As for the tax credit, the White House says on its revamped Web site that Obama and Biden want to make it permanent as they seek to boost federal spending and attention toward science.
Other Obama policies point to a new focus on acquisition oversight and prosecution of alleged waste, fraud and abuse. “The Obama-Biden administration will realize savings by reducing the corruption and cost overruns that have become all too routine in defense contracting,” the White House says online.
“That’s an area of concern,” Blakey says. AIA supports “efficient procurement,” but the trade group – and many others in Washington – advocates a go-slow approach in crafting and pursuing new laws, rules and law enforcement until more discussions occur between industry and government.
